Tilburg University
The convergence of monetary policy
Eijffinger, S.C.W.
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1991
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Eijffinger, S. C. W. (1991). The convergence of monetary policy: Germany and France as an example.
(Research memorandum / Tilburg University, Department of Economics; Vol. FEW 467). Unknown Publisher.
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THE CONVERGENCE OF MONETARY POLICY - GERMANY AND FRANCE AS AN EXAMPLE Dr. Sylvester C.W. Eijffinger
THE CONVERGENCE OF MONETARY POLICY
- GERMANY AND FRANCE AS AN EXAMPLE
1.
Introduction
The conclusion of the article will be that the convergence of monetary poliry between Germany and France has accelerated since 1986 and reached a high degree at present. The other side of this convergence is the strong dependence of the monetary policy in France on that in Germany.
2.
Policy goals
The policy goals of the Deutsche Bundesbank are founded legally by the "Gesetz uber die Deutsche Bundesbank" of July 26, 1957. The task of the Bundesbank is embedded in section 3 of the Bundesbank Act: 3~
"Die Deutsche Bundesbank regelt mit Hilfe der w~hrungspolitischen Befugnisse, die ihr nach diesem Gesetz zustehen, den Geldumlauf und die Kreditversorgung der Wirtschaft mit dem Ziel, die W~hrung zu sichern, und sorgt fur die bankm~ssige Abwicklung des Zahlungsverkehrs im Inland und mit dem Ausland".
The Act emphasizes the responsibility of the Bundesbank for monetary stability which means the stability of the value of the D-mark. The central bank should consult the federal goverment and other economic policy makers on general economic developments and the r81e of monetary policy. However, the primary task of the Bundesbank must always be its function as the guardian of the currency. As a consequence, section 12 of the Act has made the central bank independent of instructions from the federal goverment in stabilizing both the internal value, as the external value of the currency. The internal value corresponds with the domestic price level and may be considered as the main policy goal of the Bundesbank. It aims at price stability by the control of the growth of the money stock, at present measured by M3. The external value is regarded by the central bank as the purcha-sing power of the D-mark vis-à-vis other currencies and thus as the (effective) ~ exchange rate of the D-mark, i.e. the (effective) nominal exchange rate corrected for inflation differences between Germany and other countries. In Germany the objective of exchange rate stability has been subordinated to that of domestic price stability. This implies that the Bundesbank is only concerned with the consequences of the exchange rate development for the domestic price level.
The poliry goals of the Banque de France are provided for in article 1 and 4 of "~ Statuts de la Banque de France" of January 3, 1973: 4~
"La Banque de France est 1'institution qui, dans le cadre de la politique économique et financière de la nation, re~oit de 1'État la mission générale de véiller sur la monnaie ct le crédit...", and "...Elle contribue à la préparation et participe à la mise en cevre de la politique monétaire arrétée par le Gouvernement et, avec le concours, dans le cadre dc sa competence, du Conseil National du Crédit..."
government in cooperation with the Conseil National du Crédit. Although the central bank is not independent of instructions from the government according to the statutory mandate, its Governor decides in consultation with the Minister of Finance on the monetary policy in practice. In that respect the Governor focuses on the stability of the value of the French franc. The Banque de France tries to stabilize the internal value of the eurrency, corresponding with the domestic price level, by controlling the growth of monetary aggregates such as M2 and M3. Stabilizing the external value implies the stability of the ~j~ exchange rate of the French franc vis-à-vis the D-mark as an "anchor" for monetary stability and may be considered the rule of conduct for the monetary authorities. In France the objective of the control of money growth has been subordinated to that exchange rate stability. Since 1987 the Banque de France aims at stability of the nominal French franc~D-mark rate by its exchange and money market policy. It is trying to reduce the difference between the French and German money market rates.
Table 1 Con-flicts between internal a-nd external ~tabilitv
external
stability internal stability ~pnreciation of own cunency by increase of money market rate dep~eciation of own currency by decrease of money market rate restriction of r~, conflict conflict of money growth by because internal objectivesincrease of and external Germany: money market objective 1986, 1987
rate in line France:
1987, 1988
exoansion of ~g~]j~f of gQ conflict money growth by objectives because internal
decrease of Germany: - and external money market France : - objective
rate in line
with conflicts between their internal and external objective and have to give priority to one of both. In recent years the Bundesbank had chosen for internal stability and the Banque de France for external stability.
3. Monetary targets
At the end of 1974 the Deutsche Bundesbank announced as the first central bank publicly a monetary target, i.e. a desired rate of growth for a monetary aggregate on annual base. The Bundesbank decided to target the central bank money stock ("Zentralbankgeldmenge" or ZBG), a kind of weighted M3, because this aggregate takes into account the degree of liquidity of the various liquid assets and appears to be strongly correlated with the total domestic expenditures in practice. 5) Since 1979
the flexibility regarding the external and cyclical circumstances was formally
expressed by the introduction of a target z8ne ("Zielkorridor") for ZBG-growth.
Until 1985 the actual ZBG-growth met the target z6nes on annual base by the
flexible, but restrictive policy of the Bundesbank. Nevertheless, its credibility was somewhat undermined by the substantial overshooting of the target zdnes at the end of 1986 and 1987. This resulted from the high growth of currency and banknotes which have by definition a large share -more than SOo1o- within ZBG and distorted the monetary development. As from 1988 the Bundesbank turned to a target z8ne for the "unweighted" aggregate M3 which behaved on the medium term more or less the same as ZBG and was monitored next to ZBG since 1979. The reasons for this transition are the false interpretation of ZBG by the public as a monetary base concept and the higher sensitivity of ZBG for large fluctuations of domestic money market rates and exchange rates of the D-mark, especially vis-à-vis the US dollar. This phenomenon can be explained by the strong preference of residents for currency and banknotes and the currency hoarding of D-marks by non-residents.
Table 2. Monetary tareets and rates of Yrowth,)
Gertnany Fnnce Yur Z.BC M3 M2~!) M3 1980 5-B (4,8) 1] (9,8) 1981 4-7 (3~) 10 (11,4) 1982 4-7 (6,0) 1244-13Y4(11~) 1983 47 (6,9) 9 (10,2) 19B4 4-6 (4,7) Sbí.634 (7,6) 1985 35 (4,4) 4b (6,9) 1986 31í-SY4 (8,3) 35 (4j) 1987 3-6 (8,2) 4b (4,0) }5 (9,0) 1988 36 (6,8) 46 (3,7) 1989 ca3 (4,6) 4-ó (4,5) 1990 4ó í ) 34í~S'fi ( )
Sources:
Deutsche Bundesbank, Gesch~ftsbericht, 198o-89 and Banque de France, Compte Rendu, 198a89.
The lower sensitivity of M3 for interest and exchange rate fluctuations implies also a more limited effect of money market policy than in the case of ZBG and thus a longer policy horizon of the central bank. While the actual M3-growth exceeded the target z8ne in 1988 only slightly, it deed meet the objectives for 1989 and 1990.
The Banque de France announced in December 1977 for the first time publicly a target for the growth of aggregate M2 on annual base. 6~ Until 1985 the actual M2-growth exceeded in most years the target (z8ne) in France which was in the begin-ning considerably higher than in Germany.
After a temporary switch to a target z6ne for the growth of M2R (M2 with resi-dents) in 1984 and 1985 respectively M3 in 1986 and 1987, the Banque de France returned to a target zSne for M2-growth since 1987. The central bank motivated the announcement of target z8nes not only as benchmarks for the formation of inflatio-nary expectations, but also by stressing its own responsibility for monetary stability and the "z8ne franc". ~ According to the view of the Banque de France the objecti-ve of exchange rate stability alone is not sufficient for a large open economy as France. The choice of M2 as a target variable is based on the simplicity, clarity and controllability of this aggregate. It is a familiar concept to the public and consists of assets which bear no or a fixed interest. On the other hand, the rise of new financial instruments such as CDs, CPs and "sociétes d'investissement à capital variable" (SICAV's) induced a transfer of liquidity from M2 to M3 and L This transfer is empirically confirmed by the contrary development of the income velocities of M2 and M3 as from 1986. Ever since the velocity of M2 increases and that of M3 decreases gradually. 8~ Therefore, it is no surprise that the actual M2-growth develo-ped from 1987 within or even under its target z8ne, while the actual M3-growth exceeded its target z8ne in 1987 substantially. Furthermore, by the introduction of a plan for tax-deductable pension savings ("plan d'épargne populaire" or PEP) in February 1990 very large amounts were withdrawn from the savings accounts ("comptes sur Livret"). Because of its very long maturity the PEP is not a compo-nent of M2, M3 or even L. This excavates the meaning of M2 for policy purposes. As a consequence, the Banque de France may be expected to turn to a broader monetary aggregate -e.g. M3'- which comprises all liquidity with residents.
4. Monetary instruments
rate in recent years. The permanent instruments ("Grobsteuerung") have a medium policy horizon and are used to counter longer-term disturbances. Permanent instruments are the official credit facilities and the cash reserve requirements for the banks. The official credit facilities can be subdivided in the regular discount facilities ("Rediskont-Kontingente"), for which the central bank charges the discount rate ("Diskontsatz"), and the additional Lombard facilities ("Lombardkredite"), which are daily advances by the central bank against the Lombard rate ("Lombard-satz"). The discount rate was formerly the under limit for the interbank money market rate, but nowadays -from February 1985- the Treasury bill rate ("Schat-zwechsel-Abgabesatz") acts as such. Treasury bills are issued by the federal govern-ment and sold by the Bundesbank at a rate which is on average a half point higher than the discount rate. The Lombard rate lies in general 1,5 till 2 points above the discount rate and may be seen as the upper limit for the interbank money market rate, in Germany represented by the call money rate ('Tagesgeldsatz").
Before 1976 the cash reserve ratios ("Mindestreserven") were regularly changed by the Bundesbank, but after that less and less because of the long time which the banks needed to adjust their cash reserves. However, the cash reserve ratios remained relatively on a high level because these requirements function as an "automatical break" for monetary expansion and are therefore indispensable for the Bundesbank.
Since December 1986 the monetary instruments of the Banque de France consists of the exchange market policy and the money market policy. 'o~ The exchange market interventions do not only influence directly the exchange market but also ind'uectly the money market so far as they are not sterilized by the central bank. The money market policy comprises of those instruments which operate through the interbank money market ("marché interbancaire"): the official credit facilities, the money market operations and the cash reserve requirements of the Banque de France.
of open-market operations is limited because of the small volume of the open market in France. As from 1985 the cash reserve requirements ("système des réserves obligatoires") play an important r81e despite that the cash reserve ratios are internationally quite low. The Banque de France pursues with this instrument three functions. Firstly, it has to provide for a structural money market deficit to make the money market operations sufficiently effective. Secondly, the cash reserve have to act as an "automatical break" on monetary expansion, just like in Germany. Thirdly, the Banque de France wants to use the cash resefve ratios as an "active" instrument to control the growth of the monetary aggregates in the short term.
Table 3 The tra~nicsion mechanicm of monetarv poli in r a a-r?d Francelsince 1986)')
Trtwmission Germaay Fntttt
mechanism (sintt 198fi)
Moneury Of6cial ctedit fttcilities ofïtciN credit facilitiu
instrumentt Money market operations Moeey trarlcet opentions
GsA merve ntioe Casó tesetVe ntioc
Exchutde mattet Erch~ege m~ttel
interventioec intetventions
Maaenry Intetbank money marlta InteiMet moaey mnrkct
indiptom tate nte
(GII tnoney tate) (GH money nte) Moneary Main utget: M3 Maio targer. Nominal
tar~ets Additional target: Ftettcó ftanc~U-marlc
Real Us dollrr~D-mart erchange nte
exchange nte Aáditioeat at~et:M2
Policy Dovwstic ptice Ievel Dotnestic price levcl
~~ (txfotc 1986 ~~o:
Gro~s national prod~ct)
') For the analysis of the transmission mechanism of monetary policy see: S.C.W. Eijffinger, Over de beheertbaarheid van de geldhoeveelheid (on the controllability of the money stock), Amsterdam, 1986, pp. 85-95.
5. F~ cha~e a-nd moneXmarket icv
The exchange and money market policy of the Deutsche Bundesbank are aimed at different targets, while those of the Banque de France have been directed since 1986 on the same target, i.e. stability of the nominal exchange rate of the French franc vis-à-vis the D-mark.
and the Banque de France regarding their independence from the Minister of Finance in the field of exchange market policy. At present there is an important discrepancy between both central banks with respect of the frequency and thus of the effectiveness of exchange market interventions. As influencing exchange rate expectations of market participants is empirically the main effect of exchange market policy nowadays, (very) frequent interventions in this market imply generally less effective interventions. "~ Furthermore, the short-term objectives of the exchange market policy in Germany and France differ as a consequence of the asymmetry within the EMS. While the Bundesbank tries to smooth mostly fluctuati-ons of the D-mark~U.S. dollar rate, the Banque de France focuses more on the French franc~D-mark rate. When not abstaining from intervention, the Bundesbank conducts a policy of "leaning against the wind" to counter disorderly exchange market conditions. 'Z~ The Banque de France follows the same policy of "leaning against the wind" and tries to avoid marginal interventions -interventions at the limits of the EMS-band- to maintain a two-sided-risk. Of course, both central banks do not sterilize the exchange market interventions by money market operations on the short run.
At the midst of the seventies the Bundesbank put more emphasis on its money market policy to control the growth of ZBG and from 1988 of M3 through the interbank money market rate. A rise of the interbank rate both slows down the granting of credit by the banks to the private sector and stimulates the demand by the public for assets outside ZBG and M3. The central bank controls the money growth indirectly by its money market poliry which means that the policy lag will be longer than in the case of direct credit controls.
In February 1985 the Bundesbank decided to fine tune the money market more by its repurchase agreements ("Wertpapierpensiongesch~fte"). The reason for this change was the big signaling effect of adjustments of both official rates by which the money market policy had lost its flexibility.
The result was that the interbank money market rate -i.c. the call money rate- since then less depended on the discount and Lombard rate and more on the "Pension-satz". From then on the Bundesbank kept the repurchase agreements in normal circumstances tight, i.e. smaller the expected money market need. Moreover, the money market participants were more and more focusing on small adjustments of the "Pensionsatz". So the interbank rate became increasingly volatile in the (very) short run as a consequence of the greater flexibility of the money market policy. Despite its volatility the Bundesbank tries to keep the interbank rate between the Treasury bill rate ("Schatzwechsel-Abgabesatz") and the Lombard rate, thus within a band of one to one-and-a-half point. While the "Pensionsatz" is very effective with regard to the interbank rate on the (very) short term, it has no effect on the debit and credit rates which the banks charge. On the other hand, by its discount and Lombard rate the Bundesbank influences the interbank rate on the medium term and thereby also the debit and credit rates of the German banks.
well as to control its monetary aggregates. Once the decision was taken, the money market policy was developed very quickly and smoothly by the central bank. The official rates are solely determined by the Governor, after consultation with the Minister of Finance, and form the band within which the interbank money market rate fluctuates. Next to this medium term policy, the Governor fixes the amount and maturity of the calls for tender ("appels d'offres") on the very short term. In case of a turbulent money market -e.g. the end of a cash reserve period- the Banque de France may decide to turn to direct interventions in the interbank market ("pensions à moins de 5 jours") and eventually to open-market operations ("concours~reprises de liquidité). These money market operations are used for 6ne tuning of the inter-bank rate from day to day. In recent years the Banque de France is more and more aloof from influencing the interbank rate within the band of both official rates because of the unpredictable development of the autonomous factors ("facteurs autonomes") on the money market, such as the circulation of banknotes, the international reserves and the balance of the Treasury. According to the central bank the money market should regulate itself between the official rates as linuts for the interbank rate. As a consequence of the objective of exchange rate stability between the French franc and D-mark, the oftïcial rates of the Banque de France are linked to those of the Bundesbank.
Therefore, the Banque de France needs an additional and (partly) independent monetary instrument for controlling the money growth in France. The cash reserve requirements are supposed to function as an partly independent and "active" instru-ment besides the official rates. Hence, the Banque de France has experiinstru-mented two times -in June~July 1987 and May~June 1988- with a contrary policy mix of both the official rates and the cash reserve ratios. However, these experiments proved to be no independence between both monetary instruments at all. "~
6.
Convergence in Rerformance
After discussing the convergence in the implementation of monetary policy during the eighties, we will now analyse the convergence in the performance of monetary poliry between Germany and France. T'his performance can be measured by the development of four key variables in both countries during the eighties: inflation rates, real exchange rates, real short-term interest rates (money market rates) and real longterm interest rates (capital market rates).
Table 4. Inflation rates and differentials'~
Yur lnflation Germany IaMtion Fraece IetLtioo Prance . ~.infLtion Germ~ny 1980 S~ 17b B,1 1961 6,3 13,3 7,0 1982 5,3 12,0 6,7 i983 3,3 9,8 6~ 1984 2,4 7,7 5,3 1985 2,2 5,6 3,6 lver, -0.2 u 2,7 1987 0,2 3,3 3,1 1988 1,3 2,7 1,4 1989 2,8 3~ 0,7 1990 2,7 ~~ 3,4 ~~ 0,7"~') Annual rates of growth of Consumer Price Index (CPI) ") Estimates by OECD and the European Community.
Sources:
Deutsche Bundesbank, Gesch~ftsbericht, 1980-89; INSEE, Informations Rapides, 1980-89.
As a consequence of the nominal exchange rate stability and the declining inflation differential, there was also a stable development of the real exchange rate of the French frane vis-à-vis the D-mark, i.e. the nominal exchange rate corrected for the inflation differential, as from 1986 (see figure 1). 14~ This reflects that the terms of trade between Germany and France did not change much since then. However, the perfonnance of monetary policy in both countries may not be judged by the development of the inflation differential and the real exchange rate alone because these variables refer only to the past and the present and not to the future. To incorporate the expectations of the financial markets, we will turn to the develop-ment of the real interest rates in the short and long run.
FIGURE 1
FIGURE 3
Nevertheless, since the second half of 1988 there is a strong convergence of the German and French real long-term interest rates, i.e. the nominal long-term interest rates corrected for the inflation rates (see figure 3). T'he difference of the real capital market rates in Germany and France reflects the exchange rate expectations in the long run and thereby the inflationary and current account expectations in both countries on the long term. Apparently, the markets do not expect any depreciation of the franc against the D-mark in the long run. Therefore, a prolon-ged monetary policy by the Banque de France directed on domestic price stability ultimately pays. However, the monetary policy horizon proves to be rather long.
FIGURE 4
The declining inflation differential and the -since 1986- stable real exchange rate indicate that the performance of monetary policy in Germany and France has already converged to a large extent. On the contrary, the present difference between the real short-term and long-term interest rates suggest that the Banque de France still has to gain more reputation in the financial markets, but eventually will succeed. The reverse side of the medal of credibility is the loss of monetary polic~ sovereignity of the Banque de France with respect to the Deutsche Bundesbank. t ~ 1fie convergence of monetary policy has brought Germany and France nearer to an monetary union than many assume. This explains that France wants to accelerate the evolution towards EMU more than Germany.
7. Conclusion
did in 1981. Therefore, the test-case for the French government to move towards EMU is its willingness to make the Banque de France legally independent of its instructions.
Furthermore, the monetary targets of the Bundesbank and the Banque de France differ principally by the asymmetrical functioning of the EMS in which the D-mark plays a pivotal r81e. Whereas the Bundesbank is targeting only an internal objecti-ve -the growth of M3-, the Banque de France focuses mainly on an external objective -the nominal exchange rate of the French franc vis-à-vis the D-mark- and, in addition, tries to control the growth rate of M2. In future, the trade off between the internal and external objective in France might change as a consequence of the improvement of the domestic economic and monetary "fundamentals", such as the current account and the inflation rate. These developments would give the Banque de France more scope for controlling money growth at the expense of stabilizing the French franc~D-mark exchange rate. Besides, it is conceivable that the Banque de France switches to a broader monetary aggregate -e.g. M3~- which comprises all liquidity with residents. This would fit into a general tendency in the Community to control broad monetary aggregates and facilitate the ex ante coordination of monetary poliry by the Committee of Central Bank Governors.
The money market policy both in Germany and in France is directed on the inter-bank money market rate -i.e. the call money rate- as monetary indicator. For that purpose the Bundesbank, as well as the Banque de France try to keep the interbank rate within the band of their official rates and to fine tune the interbank rate by their money market operations. Nevertheless, there is still an important discrepancy with respect to the frequency and thus the effectiveness of exchange market intervention in Germany and France. This results from the diverging independence between both central banks in the field of exchange market policy. Also, another test-case for the French government will be its readiness to give the full respon-sibility for intervention to the Banque de France.
Finally, both in Germany and in France the monetary instruments are converged to a high degree as a consequence of the process of financial liberalization and integration in the Community. There is an obvious tendency to fully market-oriented, indirect instruments, such as:
the official credit facilities (quantitíes and rates) as an "active" instrument on the short and medium term;
the money market operations (interbank and open market) as an"active" instrument on the very short term; and
the cash reserve requirements (ratios) as a"passive" instrument, i.e. an "auto-matical break" on monetary expansion.
NOTES
1) Cf. Committee for the study of economic and monetary union (chairman: Mr. Jacques Delors), Report on economic and monetarX union in the European Communitv. Luxembourg, April 1989, p. 12.
2) Cf. "Pdhl suggests dual -speed union", Financial Times. June 12, 1990. Mr. Póhl states: "What I could envisage is a smaller number of countries would start with a European Central Banking System and other who have not reached the same degree of convergence are invited for later".
3) Cf. Die Deutsche Bundesbank-Geldoolitischen Aufgaben und Instrumente. Sonderdrucke der Deutschen Bundesbank, No. 7, Frankfurt-am-Main, April 1985, pp. 103-128.
4) Cf. Banque de France, La Banque de France et la Monnaie. Paris, 1986, pp. 149-157 and W. Eizenga, The BancUle de France and Monetary Policv. SUERF Papers on Monetary Policy and Financial Systems No. 8, Tilburg, 1990, pp. 1-6.
5) The central bank money stock consists of the sum of currency and banknotes (C) and the cash reserve requirements for the banks against demand deposits (D), time deposits (T) and savings deposits (S):
ZBG - C f 0,166D f 0,124T f 0,081S.
Cf. H. Schlesinger, The Setting of Monetary Objectives in Germany, in: P. Meek (ed.), Central Bank Views on Monetarv TargetinE, New York, 1983, pp. 6-17.
6) The monetary aggregates in France are defined as follows: M1 - currency t banknotes t checkable demand deposits;
M2 - M1 f non-checkable demand deposits f savings deposits; M3 - M2 t foreign currency deposits f time deposits
t money market securities hy banks (incl. CDs); L- M3 f contractual savings t Treasury bills
t money market securities by non-banks (incl. CPs).
7) Cf. J.-P. Patat, Monnaie institutions financières et politi ue monétaire. Economica, Paris, 1987, pp. 299-308.
8) For the income velocities of M1, M2 and M3 see: Conseil National du Crédit, Rapport Annuel 1989. Paris, 1990, p. 53.
10) Until 1986 the Banque de France used the "encadrement du crédit". a system of quantitative controls on credit to the private sector. It was abolished because of its increasing complexity and distortion of competition and its declining effectiveness on money growth. Cf. Y. Barroux 8c N. Dagognet, Analysis of the Relationship between Money Stock and Monetary Base: The French Experien-ce during the period of Quantitative Controls on Credit (1973-1985), in: P. Artus 8c Y. Barrouz (eds.), Monetary Policy-A Theoretical and Econometric ~proach. Kluwer Academic Publishers, Dordrecht, 1990, pp. 117-129.
11) Cf. S.C.W. Eijffinger á A.P.D. Gruijters, On the effectiveness of daily interven-tions by the Deutsche Bundesbank and the Federal Reserve System in the U.S. dollar-Deutsche Mark exchange market, in: E. Baltensperger 8r. H.W. Sinn (eds.), x h nge Rate Regimes and Cu-rrencv nion. MacMillan Publishers, London, 1990.
12) Cf. S.C.W. Eijffinger 8c A.P.D. Gruijters, On the short term objectives of daily interventions by the Deutsche Bundesbank and the Federal Reserve System in the U.S. dollar-Deutsche Mark exchange market, Kredit and Kapital. Heft 1~2, Spring 1991.
13) In June 1987 the official rates were reduced by 1~4 point and next month the ratio for time deposits was raised with one point. Both official rates were also reduced by 1~4 point in May 1988, while next month the ratios for savings and time deposits were raised with 1,5 respectively 0,5 point.
14) In 1986 foreign exchange controls in France were considerably eased to some not onerous measures and quantitative controls on credit were removed: A. Icard, FxchanPP Rates and Interest Rates inside the EM~-The French
Eacve-rience. Presentation to the IMF Visitors Center, Washington, April 18, 1990.
LITERATURE
Banque de France, La Banque de France et la Monnaie, Paris, 1986.
Banque de France, Comnte Rendu 1989. Paris, 1990.
Y. Barroux 8t N. Dagognet, Analysis of the Relationship between Money Stock and Monetary Base: The French Experience during the Period of Quantitative Controls on Credit (1973-1985), in: P. Artus 8c Y. Barroux (eds.), Monetary Polic,y - A Theoretical and Econometric Approach. Kluwer Academic Publishers, Dordrecht
1990.
Committee for the study of economic and monetary union (chairman: Mr. Jacques Delors), ~,~port on ernnnmic and monetaq~ union in the EuroAean CorrLmunitv. Luxembourg, April 1989.
Conseil National du Crédit, Raovort Annuel 1989. Paris, 1990.
Deutsche Bundesbank, Die Deutsche Bunde~barLk - Geld~litischen Aufeaben und Instrumente. Reihe der Sonderdrucken No. 7, Frankfurt-am-Main, April 1985.
Deutsche Bundesbank, Gesch~ftsbericht 1989. Frankfurt-am-Main, 1990.
H.J. Dudler, The Implementation of Monetary Objectives in Germany -0pen Market Operations and Credit Facilities, in: P. Meek (ed.), OD.CIt.. 1983.
W. Eizenga, The Banque de France and Monetarv Policv. SUERF Papers on Monetary Policy and Financial Systems, No. 8, Tilburg, 1990.
S.C.W. Eijffinger, Over de beheersbaarheid van de geldhoeveelheid ( On the
control-labili of the money stock). Free University Press, Amsterdam, 1986.
S.C.W. Eijffinger á A.P.D. Gruijters, On the effectiveness of daily interventions by
the Deutsche Bundesbank and the Federal Reserve System in the U.S.
dollar-Deutsche Mark exchange market, in: E. Baltensperger 8c H.W. Sinn (eds.),
~h~i1.-ee R~te Reci es a d~urrenc~ L,r~i~, ?eJacMillan Publishers, London, 1990.n
S.C.W. Eijffinger 8z A.P.D. Gruijters, On the short term objectives of daily interven-tions by the Deutsche Bundesbank and the Federal Reserve System in the U.S. dollar-Deutsche Mark exchange market, Kredit und KaRital. Heft 1~2, Spring 1991.
m
J.-P. Patat, Monnaie, inctitutinnc financières et politique monétaire. Economica, Paris, 1987.
Fieure 1. The real exchan~e rate of the French franc vis-à-vis the D-mark. (January 1979 - 100; Dates of EMS-realignments -')
117.50 -115.0 112.5D 11D.0 1D7.S0 105.D 102.50
100.0
19 80 Bi ~~82 83 84 85~ . 86. .~ 67~ -. BB. .~ 89i r
The real short-term interest rates in France and GermanyScorrected for CPII.
fRANCE .--.~~~.. WEST CERl~ANY 10.0 7.50
5.0
2.50O.D
-2.50 -5.D ,LLiLI l l Lllll l Llll ll l 1 111 ~ 1 i~ 11111119 8D 81 Lllll ll 11L81 lll.l.l l ll L llill l I llllll83 84 111. LLL LLL1ll1111L 111185 86 1.u.l.l. L u w87 ~luu ulll88 Lllll. L1111L1111L89 90
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422 J.P.C. Blanc
Cyclic polling systems: limited service versus Bernoulli schedules 423 M.H.C. Paardekooper
Parallel normreducing transformations for the algebraic eigenvalue problem
424 Hans Gremmen
On the political (ir)relevance of classical customs union theory
425 Ed Nijssen
Marketingstrategie in Machtsperspectief 426 Jack P.C. Kleijnen
Regression Metamodels for Simulation with Common Random Numbers: Comparison of Techniques
427 Harry H. Tigelaar
The correlation structure of stationary bilinear processes 428 Drs. C.H. Veld en Drs. A.H.F. Verboven
De waardering van aandelenwarrants en langlopende call-opties 429 Theo van de Klundert en Anton B. van Schaik
Liquidity Constraints and the Keynesian Corridor
430 Gert Nieuwenhuis
Central limit theorems for sequences with m(n)-dependent main part 431 Hans J. Gremmen
Macro-Economic Implications of Profit Optimizing Investment Behaviour 432 J.M. Schumacher
System-Theoretic Trends in Econometrics
433 Peter M. Kort, Paul M.J.J. van Loon, Mikulás Luptacik
Optimal Dynamic Environmental Policies of a Profit Maximizing Firm 434 Raymond Gradus
435 Jack P.C. Kleijnen
Statistics and Deterministic Simulation Models: Why Not? 436 M.J.G. van Eijs, R.J.M. Heuts, J.P.C. Kleijnen
Analysis and comparison of two strategies for multi-item inventory systems with joint replenishment costs
437 Jan A. Weststrate
Waiting times in a two-queue model with exhaustive and Bernoulli service
438 Alfons Daems
Typologie van non-profit organisaties 439 Drs. C.H. Veld en Drs. J. Grazell
Motieven voor de uitgifte van converteerbare obligatieleningen en warrantobligatieleningen
440 Jack P.C. Kleijnen
Sensitivity analysis of simulation experiments: regression analysis
and statistical design
441 C.H. Veld en A.H.F. Verboven
De waardering van conversierechten van Nederlandse converteerbare obligaties
442 Drs. C.H. Veld en Drs. P.J.W. Duffhues
Verslaggevingsaspecten van aandelenwarrants
443 Jack P.C. Kleijnen and Ben Annink
Vector computers, Monte Carlo simulation, and regression analysis: an introduction
444 Alfons Daems
"Non-market failures": Imperfecties in de budgeT,sector
445 J.P.C. B1anc
The power-series algorithm applied to cyclic polling systems 446 L.W.G. Strijbosch and R.M.J. Heuts
Modelling (s,Q) inventory systems: parametric versus non-parametric approximations for the lead time demand distribution
447 Jack P.C. Kleijnen
Supercomputers for Monte Carlo simulation: cross-validation versus Rao's test in multivariate regression
448 Jack P.C. Kleijnen, Greet van Ham and Jan Rotmans
Techniques for sensitivity analysis of simulation models: a case study of the C02 greenhouse effect
449 Harrie A.A. Verbon and Marijn J.M. Verhoeven
450 Drs. W. Reijnders en Drs. P. Verstappen
Logistiek management marketinginstrument van de jaren negentig 451 Alfons J. Daems
Budgeting the non-profit organization
An agency theoretic approach
452 W.H. Haemers, D.G. Higman, S.A. Hobart
Strongly regular graphs induced by polarities of symmetric designs 453 M.J.G, van Eijs
Two notes on the joint replenishment problem under constant demand 454 B.B. van der Genugten
Iterated WLS using residuals for improved efficiency in the linear model with completely unknown heteroskedasticity
1~55 F.A. vai: dcr Duyn S~houten nnd S.G. Vannestc
Two Simple Control Policies for a Multicomponent Maintenance System 456 Geert J. Almekinders and Sylvester C.W. Eijffinger
Objectives and effectiveness of foreign exchange market intervention A survey of the empirical literature
457 Saskia Oortwijn, Peter Borm, Hans Keiding and Stef Tijs Extensions of the i-value to NTU-games
458 Willem H. Haemers, Christopher Parker, Vera Pless and Vladimir D. Tonchev
A design and a code invariant under the simple group Co3 459 J.P.C. Blanc
Performance evaluation of polling systems by means of the power-series algorithm
460 Leo W.G. Strijbosch, Arno G.M. van Doorne, Willem J. Selen A simplified MOLP algorithm: The MOLP-S procedure
461 Arie Kapteyn and Aart de Zeeuw
Changing incentives for economic research in The NetYierlands 462 W. Spanjers
Equilibrium with co-ordination and exchange institutions: A comment 463 Sylvester Eijffinger and Adrian van Rixtel
The Japanese financial system and monetary policy: A descriptive review
464 Hans Kremers and Dolf Talman
A new algorithm for the linear complementarity problem allowing for an arbitrary starting point
465 René van den Brink, Robert P. Gilles
IN 1991 REEDS VERSCHENEN
